CALGARY, May 16, 2012 /CNW/ - Petromanas Energy Inc. ("Petromanas" or
the "Company") (TSXV: PMI) announced it has successfully completed its
previously announced definitive farm out agreement (the "Agreement")
with a wholly owned subsidiary of Royal Dutch Shell plc ("Shell")
following the Albanian government's approval of the assignment of
interest to Shell. Under the terms of the agreement, Shell will farm
into the Company's rights on exploration Blocks 2-3 (the "Blocks")
comprising approximately 852,000 acres onshore Albania. Shell is
acquiring a 50% participating interest in the Blocks in exchange for
payments and carried costs up to US$50.3 million. Petromanas continues
to act as operator of the Blocks. Additionally, the Company has been
notified that the Albanian government has approved construction permits
for road and lease construction on the Blocks at the Shpirag-2 and
Juban-1 drilling locations.
"Receiving these government approvals removes the critical barriers in
executing the Company's 2012 business plan. Closing the Shell farm-out
agreement sets the stage for our continued close collaboration with
Shell," said Mr. Glenn McNamara, CEO of Petromanas. "Receipt of the
construction permits allows us to immediately commence road and lease
construction and we expect to spud the Shpirag-2 well by mid-year."
Under the terms of the Agreement, Shell will carry Petromanas'
exploration costs up to US$22.5 million in the first exploration period
and, subject to entering into the second exploration period,
Petromanas' well costs up to US$11.5 million. Any potential excess
costs of the work program over Shell's share plus the carried costs
shall be jointly paid by both parties in proportion to their
participating interest. In addition, Shell is paying cash consideration
of US$16.3 million, of which US$11 million is refundable to Shell,
should Petromanas secure a partner for the other Petromanas blocks
during the current exploration periods that expires December 25, 2012.
Petromanas intends to spud the Shpirag-2 well in late Q2 2012, once
lease and access road construction is completed. Shpirag- 2 is one of
the Company's largest prospects. The KCA Deutag T-46 rig, which will be
used for the drilling operations, arrived in Albania in early May. The
Juban-1 well in Blocks A-B is expected to be drilled following
completion of drilling at Shpirag-2 and management is currently
finalizing options for completing the balance of the Company's 2012
well commitments.
"Petromanas has completed public consultation in the communes around and
near the drilling sites and is looking forward to commencing
operations.